New Payroll Software at Arizona State U. Shorts Hundreds of Employees

Chronicle of Higher Education, 8/7/07

By Dan Carnevale

Arizona State University's new PeopleSoft payroll software has shorted the paychecks of hundreds of employees since it was put into operation last month, forcing some employees to seek emergency loans to make ends meet.

More than 700 of the university's 15,000 faculty and staff members received less money than they should have, including some people who didn't receive any pay at all.

Leah Hardesty, media-relations officer for the university, said the software was installed on July 1. Because of a combination of technical and user errors, she said, payroll glitches have plagued the system for the past two pay periods.

"We had a few mechanical errors and miscalculations," Ms. Hardesty said. "We've been working on the problem around the clock."

Jay Reinke, a painter for the university, said he had just come back from vacation to find his paycheck was made out for $0.00. He said it took a week before he got all the money he was owed. "They couldn't even tell me what was going on," he said.

Thomas Mendenhall, another painter at the university, said he ended up bouncing five checks when he too was paid $0.00. His paycheck is usually deposited automatically in his bank account.

"I am one of the unfortunate ones who live paycheck to paycheck," Mr. Mendenhall said. "It absolutely wiped me out."

It took about a week before the university paid him, he said, and even then he received less than he was owed. "I am going to take legal action," Mr. Mendenhall said. "The timing was horrible. The response was horrible."

Ms. Hardesty said the payroll problem seemed to be related to a switch in how paychecks are calculated. In the old system, employees were paid on the 15th and 30th of each month. Now they are paid every other Friday.

That means employees now get 26 paychecks per year instead of 24, she said. Each paycheck was supposed to be for a smaller amount than it was in the old system, but apparently the new calculations didn't turn out right.

Some university employees have been getting loans from Arizona State Credit Union to pay their bills. Paul Stull, senior vice president for marketing of the credit union, said a discount-loan program was set up when the university first announced the change in the payroll software. The idea was that some people might need some extra cash during the change. But, he said, the credit union didn't anticipate the problems that arose.

So far 50 people have asked for the loans, but Mr. Stull said he did not know how many of those people were affected by the glitch and how many were seeking extra money for other reasons.

"That wasn't something that we had planned for," Mr. Stull said. "We are expecting that we'll do more loans this week and next week."

Ms. Hardesty said the university would reimburse people who were charged late fees or overdraft fees because the glitch left them without enough money in their accounts. Any interest incurred from bank loans will have to be evaluated on a case-by-case basis, she said.

Officials from Oracle Corporation, which owns PeopleSoft, were unavailable for comment.